Alarmed by the adverse customer reaction to e-commerce giant Flipkart's 'Big Billion Day' sale, the consumer affairs department is considering including e-commerce as a separate section in the Consumer Protection Act, 1986.
Flipkart's sale saw consumers complaining on social media that advertised offers for the 'Big Billion Day' on October 6, were not available on the company's website. Server errors and delivery delays were among the other common complaints. A day later, Flipkart issued an apology to consumers.
According to officials, a move to bring e-commerce into the law's ambit, in the offing since the National Democratic Alliance government took charge, gathered pace after the mess after Flipkart's sale.
AMENDMENT: The Consumer Protection Act to be amended to include e-commerce and misleading advertisements
CURRENT ACT: Covers all trade, except e-commerce
WHEN? Amendments could be brought in the winter session of Parliament
GOVT VIEW: The thinking in BJP is that e-commerce needs to be regulated
THE TRIGGER: Recent mega sales by e-commerce sites like Flipkart and Snapdeal led to many consumer complaints
"Though sales of all types are covered under the Consumer Protection Act, e-commerce is not specifically defined. So, buyers sometimes do not get adequate relief," a senior official from the department said.
He said misleading advertisements would also be included in the Act. "Both amendments - one on e-commerce and the other on misleading advertisements - will be put up for Cabinet approval and the amended Bill will be tabled in the winter session of Parliament," the official said. Parliament's winter session is expected to begin at the end of November.
A section of the ruling Bharatiya Janata Party (BJP) is concerned with the regulatory void over e commerce. "E-commerce platforms are unregulated, which sometimes leads to customers being deceived. There should be healthy competition between online and offline trade, and companies should not be allowed to lure customers through misleading offers," Ashok Goyal, co-convener of BJP's traders' cell, told Business Standard.
The Confederation of All India Traders (CAIT), in a letter to Commerce Minister Nirmala Sitharaman, also demanded regulation for e-commerce in India. Sitharaman herself had initially talked of ordering a probe into Flipkart's sale but later denied any investigation had been ordered.
According to an executive with a leading e-commerce company, the government's move to specifically include the industry in the Consumer Protection Act is a welcome step. "It will strengthen the industry as e-commerce is evolving. It could also curb guerrilla campaigns by companies."
Consumer rights activist Bijon Mishra said: "This move should have been attempted many years ago."
Flipkart had said it clocked gross merchandise value of $100 million within 10 hours on 'Big Billion Day' sale. Later, rival Amazon claimed it had a 200 per cent jump in traffic on the first day of its week-long Diwali sale. Following major online sales by e-commerce companies, traders have been at loggerheads with their online rivals, though e-commerce is just about one per cent of India's total retail market.
"For consumers, it (protection under law) is a win-win situation, but e-commerce companies might need to alter their processes based on the new amendments," said Rohan Dighe, founder & chief executive of ViralMint, an onsite marketing platform.